New #CokeLeak: Soda Tax Opposition in 8 More Countries
More emails from the recent #CokeLeak of Coca-Cola executive emails expands their worldwide strategy of soda tax opposition to 8 more countries: South Africa, Russia, Portugal, Spain, Germany, Ecuador, Canada, India.
In South Africa, the Treasury Secretary announced an interest in a soda tax in its 2017 budget. Coke was surprised and quickly shifted it’s astroturf “responsible marketing” coalition into an anti-tax coalition. Industry coalitions seem like pawns that can be shifted by Coca-Cola along with the company’s policy priorities.
“The Coca-Cola Company has a seat at the table in on-going regulatory discussions with the Ministry of Health, which did not know of tax the night prior to its introduction. With the announcement, the BU has shifted industry coalition work on responsible marketing to engagement with this tax threat, but details on the actual tax have not been published.”
In Russia, the government is considering taxing soft drinks, chips, and palm oil. Coca-Cola responded swiftly and effectively:
“The team has made progress with stakeholder meetings over the last few weeks. The government has mostly abandoned the legislative approach, but the involved ministries are still investigating the potential of the tax and have made no formal decision on it. The Prime Minister, the President’s Ombudsman, the Ministry of Economic Development and the Ministry of Agriculture have all publicly opposed the tax. The Ministry of Finance has not yet announced its final position.”
In Portugal, Coke actually wants to try to lower soda taxes.
“The government approved the 2016 Budget, which includes no new taxes. VAT on food has been reduced from 23% to 14%, and the team is engaged with the government in an effort to lower tax on beverages by late 2016 or early 2017.”
Which apparently went in the other direction last week when Portugal introduced a new soda tax to fund the public health service.
In Spain, Coke is monitoring their discussions closely:
“The team is partnering with local food and beverage associations to address potential regional tax proposals.”
“In alignment with the European Union’s initiative, Spain’s congress is considering altering its policy on corporate taxation and is studying the corporate taxation policies of other countries.”
Coke reports that their efforts have paid off in Germany, where German Federal Minister of Agriculture Christian Schmidt apparently does not support Great Britain’s soda tax.
“This confirms that constructive dialogue is paying dividends and the current government supports the facts the team has put forth the last few years.”
“However, the situation can change after the next federal election in 18 months, and engagement and innovation will continue.”
In Ecuador, President Rafael Correa proposed a new soda tax to address the country’s revenue problems. Coke appears to be using the strategy of broadening the tax to include other
“Given the President’s direct involvement and the plight of the Ecuadoran economy, which is in desperate need of revenue, it will be difficult to defeat the tax outright, but team will focus on doing so. It will also work with allies in government on industry agreed-to efforts to broaden the tax, as well as engagement senior Ecuadoran leaders.”
This was the same we found being discussed in the UK where “Options to broaden the affected categories are being discussed if the tax cannot be defeated” and Isreal where “Any discussion about taxation on SSBs must be steered towards addressing ALL added sugars in all foodstuffs”. Strange considering the soda industry’s public stance against “grocery taxes” in the US this election season.
In Canada, Coca-Cola thought in April that their proactive lobbying had been successful in stopping any soda tax momentum.
“The local team met with key officials in the Quebec Premier’s office and Ministry of Finance as well as MNA’s from the beverage caucus. Officials gave clear confirmation that the government’s position remains unchanged and they will not consider any taxes or tax increases in the lead up to the 2016 budget.
Across India, Coca-Cola seems to be been losing their fights and soda taxes are rising.
“The state of Karnataka has increased VAT on Sparkling drinks by 5%, bringing the rate to 20%. In Maharashtra, where we were very hopeful of some relief, we were let down. There was no relief and tax rates remain high. States and the Central Government appear to be moving ahead with the recommended Demerit Tax rate of 40%; 20–21% as Excise Duty and 19–20% as VAT in States.On National GST legislation and a possible 40% excise tax on soft drinks, it looks like the legislation will not pass this session. The team continues to work to eliminate or reduce punitive excise tax proposals.”
These new updates brings the total list of countries where Coca-Cola is pursuing soda tax opposition to at least 14: United States, Israel, France, Poland, Bosnia Herzegovina, United Kingdom, South Africa, Russia, Portugal, Spain, Germany, Ecuador, Canada, and India.
Since this leaked Government Relations update is 6 months old now, I wonder how many countries Coke is lobbying in their October 2016 progress report? With voluntary “transparency” we may never know.